GMV is defined as the value of confirmed orders of products and services,
regardless whether the products or services are consumed or delivered. The GMV of transaction services refer to GMV generated by the Baidu platform through products such as Baidu Nuomi, Baidu Deliveries, Baidu Wallet and Baidu Maps.
Baidu Nuomi operates an online local commerce marketplace that connects merchants with users by offering goods and services
provided by third-party merchants with discount prices. Baidu Nuomi generates revenue primarily by acting as a marketing agent for local merchants. Baidu Nuomi presents its revenue on a net basis, representing the amount billed to registered users
less the amount paid to merchants.
Baidu Deliveries operates an online platform on which users can place restaurant
delivery orders. Baidu Deliveries presents its revenue on a net basis, representing the amount billed to registered users less the amount paid to merchants, to whom we provide online marketing and technology support services. Such revenue is
typically a percentage of the transaction amount of orders processed through Baidu Deliveries platform. Baidu Deliveries also generates delivery revenue by providing food distribution services to users.
Baidu Mobile Game operates a mobile game platform on which registered users can access games provided by third-party game
developers. Baidu Mobile Game generates revenue primarily by acting as an agent and presents its revenue on a net basis, representing the amount billed to registered users less the amount paid to game developers. The business of Baidu Mobile Game
will be disposed in 2017 as we entered into an equity transfer agreement with a third-party purchaser in January 2017.
iQiyi. iQiyi is an online video platform with a content library that includes copyrighted movies, television series,
cartoons, variety shows and other programs. iQiyi derives a majority of its revenues from online advertising services. As is customary in the advertising industry in China, iQiyi offers commissions to third-party advertising agencies and recognizes
revenue net of these commissions. iQiyi also derives an increasing portion of its revenues from other sources, such as subscription services and sub-licensing of licensed contents to other online video
For most search services, we collect payments both from our customers directly and through our distributors. We require our P4P
customers to pay a deposit before using our P4P services and remind them by an automated notice to replenish the accounts after their account balance falls below a designated amount. We deduct the amount due to us from the deposit paid by a customer
when a user clicks on the customers link in the search results. In addition, we offer payment terms to some of our customers other than P4P customers based on their historical marketing placements and credibility. We also offer longer payment
terms to certain qualified distributors, consistent with industry practice.
For most transaction services, we collect
payments directly from users when they purchase goods or services on our platforms. We settle with merchants or other third parties in accordance with the terms agreed upon.
For most services provided by iQiyi, customers may enter into different payment terms based on their historical marketing
placements and credibility. Users are also encouraged to purchase subscription services to get enhanced user experience, and such payments are collected from the users by iQiyi or through agents such as China Mobile.
As of December 31, 2016, we had accounts receivable of RMB4.1 billion (US$591.9 million), net of allowance of
RMB177.4 million (US$25.6 million).